How does time become manipulated as the man's hanging nears?

At the beginning of Ambrose Bierce's "An Occurrence at Owl Creek Bridge," Peyton Fahrquhar is about to be hanged. At the end of the book, he has died on the noose. The entire process takes minutes at most. But the events described in the novel seem to take much longer, compressing an elaborate fantasy into a short timeframe.
The first clue that Bierce is playing with time comes at the end of section I, when the narrator says the following: "As these thoughts, which have here to be set down in words, were flashed into the doomed man's brain rather than evolved from it the captain nodded to the sergeant." The complex thoughts that instantaneously"flashed" through Farquhar's mind foreshadow the twist at the end of section III.
In that section, the action appears to take a good while to complete. At first, Farquhar's escape takes minutes as he frees himself from the noose; then, it takes days as he staggers through the woods to his wife waiting at home. However, all this time is an illusion. The entirety of the third section is a fantasy. His escape and eventual return to his family were all a dream that "flashed" through the dying brain of Farquhar as he asphyxiated.